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December 1, 2006 - [Register or Login to view links] is reporting about a meeting Microsoft held with analysts to break down the past and future successes of the Xbox brand. Colin Sebastian from analyst group Lazard Capital Markets sent out details from the meeting, which he called "upbeat." Of key interest was Sebastian's belief that Microsoft is reaping the rewards from the shortages of PS3s and Wiis this holiday season.

"We also believe the Xbox 360 may be benefiting at retail this holiday from short supplies of PS3 and Wii consoles. Recently, Microsoft executives reaffirmed the company's goal of reaching 10 million Xbox 360 units installed worldwide by the end 2006."

Regarding the attitude held by Microsoft executives regarding the success of the Xbox, Sebastian commented: "Management appeared to be upbeat regarding the current state of the business, particularly with progress made in establishing the Xbox 360 as the early leader among next generation consoles, and also with penetration and usage of Xbox Live services."

Sebastian reported that sales of Xbox 360 games seem to be going strong this year. The analyst continued: "Management indicated first-party software title Gears of War is selling well, and may be driving some incremental hardware sales. In addition, the title has now overtaken Halo [2] in popularity on Xbox Live. Based on our retail checks, we believe Xbox 360 software overall is strong at retail thus far in the holiday period."

Looking at the future, Sebastian noted the advances made in the European market, while acknowledging the still sluggish sales in Japan. "North America remains the strongest Xbox 360 market; however, Microsoft appears to be making some strides in other geographies, most notably in the U.K. and northern Europe, while we believe sales are still weaker in Japan," said Sebastian.

To conclude, Sebastian reasserted Microsoft's online strengths: "Xbox Live continues to be a significant point of differentiation for Xbox, and we believe Microsoft remains focused on distinguishing the Xbox 360 through a robust online offering, including Arcade, community features, digital downloads/micro-transactions and in-game advertising (through Massive)."

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